It is one thing to bring broad allegations against a big international bank. It is quite another for an individual banker to convicted of criminal charges in connection with alleged tax evasion.
U.S. authorities have focused much of their offshore compliance effort on Swiss banks. Credit Suisse, in particular, has come in for considerable recent scrutiny. As we noted in our February 26 post, Congress even held a hearing on the role of Credit Suisse in allegedly facilitating tax evasion.
At the time of that hearing, no individual Credit Suisse bankers had been convicted on U.S. tax evasion charges. In this post, we will discuss how this has now changed.
This week, a 56-year-old Swiss citizen who had worked for a key Credit Suisse subsidiary pleaded guilty to a conspiracy count in connection with alleged tax evasion by U.S. taxpayers through undisclosed foreign accounts.
The banker has agreed to cooperate with U.S. authorities. In return, federal prosecutors have said they will recommend to the sentencing judge that the man get a break on his sentence.
The banker was in the U.S. when he was arrested. After the arrest at Reagan National Airport in Washington, the banker was freed on bond. He faces a maximum sentence of five years in prison.
The banker who pleaded guilty this week was one of eight Credit Suisse bankers indicted in the U.S. in 2011 on conspiracy charges.
It remains to be seen how much the convicted banker's cooperation may help U.S. authorities identify U.S. taxpayers with undisclosed Swiss accounts
But the ongoing effort to implement the Foreign Account Tax Compliance Act (FATCA) is likely to increase the pressure on taxpayers who may have failed - perhaps not willfully - to disclose their offshore accounts to the IRS.
Source: Wall Street Journal, "Ex-Banker's Plea Deal Outlines Trail of a Tax-Evasion Scheme," Andrew Grossman, John Leitzing and Laura Saunders, March 12, 2014